In recent weeks, politics has shown an impasse. Spreads soaring: Here’s a practical example of how gold has performed.
These days we have been bombarded by various televisions, extraordinary editions, newspapers, and everything that makes entertaining, the political crisis.
Naturally, we will not go into specific merits, but we will take it as a starting point to see in practice and a very current situation how gold has behaved as a safe haven and as an instrument for financial growth.
The gold we have seen in international markets has hovered around the $1,300 per ounce level, but this is a less significant figure.
In recent weeks, the government crisis in the Bel Paese has given wings to the spread, and without going into the actual description, we explain that it is used as a key value with regard to investors’ fears about the risk of our country.
In other words, the more it increases, the greater the risk that people could find themselves in serious difficulty. Naturally, it is the citizens who pay the price. This of course does not happen only in the boot but in all countries of the world.
When the spread of fever rises, the first thing to do is not to panic and carefully observe what is happening. If the growth of the spread continues for several weeks, countermeasures should be taken.
However, the advice is even more valid, why find yourself in difficulty and not prevent the risk factor? To do this you don’t need to be a great economist, but you just need to buy some physical gold to protect your portfolio.
Let’s take a practical example: for someone who had bought 10,000 euros of BTP expiring in 2027 about ten days ago and resold them today, they would suffer a loss of around 1,000 euros or 10%.
Instead, for those who had chosen to buy gold for the same amount, resold today, on the contrary, they would have obtained a profit of around 1,000 euros.
All major international and national crises started from the bond market rather than from the stock market. This is why we often look at the spread between government bonds and their counterparts.
So you must always remember that the value of a physical asset such as gold, silver, and other precious metals not only tends to increase in times of economic downturn but also protects against inflation and the risk of a state’s default.